Manhattan Sports Rest. of Am., LLC v Lieu

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Manhattan Sports Rest. of Am., LLC v Lieu 2015 NY Slip Op 32218(U) November 13, 2015 Supreme Court, New York County Docket Number: 654076/13 Judge: Jennifer G. Schecter Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 57 ----------------------------------------x MANHATTAN SPORTS RESTAURANTS OF AMERICA, LLC, Index No. 654076/13 Plaintiff, -againstSUSANNE LIEU, Defendant. ----------------------------------------x SUSANNE LIEU, Third-Party Plaintiff -againstKEITH KANTROWITZ, Third-Party Defendant. -------------------------------------------x JENNIFER G. SCHECTER, J.: Motion sequence numbers 03 and 04 are consolidated for disposition. Pursuant to CPLR 3211(a) (5) and (7), in motion sequence number 03, plaintiff Manhattan Sports Restaurants of America, LLC (MSRA) moves to dismiss defendant Susanne Lieu's defamation and intentional infliction of emotional distress counterclaims. who is the In motion sequence number 04 Keith Kantrowitz, managing member of MSRA and the third-party defendant, moves to dismiss the third-party action on the same grounds. The motions are denied. Background As set forth more fully in this Court's prior Decision and Order (Affirmation of Kathleen Massey in Opposition to Dismiss Counterclaims [Aff Opp], Ex D, Decision and Order [* 2] MSRA v Lieu Index No 654076/13 Page 2 dated Sep 11, 2014 [Sept 2014 Order]), this case relates to MSRA's lease of commercial space at One Dag Hammarskjold Plaza in Manhattan. restaurant. MSRA used the premises Plaza Tower, LLC to operate Siro 's--a (Plaza Tower) was the over landlord and MSRA leased the space from RCSH Operations, d/b/ a Ruth's Chris Steakhouse (RCSH). After MSRA stopped paying its rent, RCSH failed to pay rent to Plaza Tower. Ultimately, in March 2013, prior to expiration of its sub-lease, MSRA vacated the space. This chain of events precipitated multiple lawsuits over the unpaid rent and additional rent. Plaza Tower obtained a judgment for rent and additional rent against RCSH's guarantor (Index No. 100279/13) and, in a separate action, RCSH is seeking a judgment against MSRA for rent and additional rent (Index No. 151125/13) In this action, MSRA sues Suzanne Lieu who dealt with Siro's on behalf of Plaza Tower. MSRA alleges, among other things, that Lieu, an attorney, impeded its business (Aff Opp, Ex B [Amended Complaint] ~~ Lieu moved to dismiss the 5-9). complaint and her motion was granted in part. Six of MSRA's 11 causes of action against her were dismissed (see Sept 2014 Order), leaving five viable claims: with economic improperly relations based on interfered with MSRA's (1) tortious interference allegations that Lieu relationship with RCSH, [* 3] MSRA v Lieu Index No 654076/13 Page 3 (Sept 2014 Order at 7; Amended Complaint at grgr 55-61), (2) trespass to property based on allegations that Lieu visited Siro's unannounced and disrupted its staff (Sept 2014 Order at 7; Amended Complaint at grgr 62-66), (3) trespass to chattel based on allegations that Lieu interfered with MSRA's move out of the building causing damage conversion of Complaint at Lieu property <][<][ "created, 67-71); such as "spoiled food" and (Sept 2014 Order at _ 9; Amended (4) fraud based on allegations that false invoices or· caused to be created" misrepresenting amounts owed (Sept 2014 Order at 12; Amended Complaint at grgr 93-103); and (5) violation of New York City Human Rights Law§ 8-107(5) (b) ·based on allegations that Lieu engaged in discrimination privileges of the . "'in the terms conditions or . rental or lease' because of the race, national origin, alienage or citizenship status of plaintiff's customers" (Sept 2014 Order at 11; Amended Complaint at grgr 8891) . In its complaint, MSRA alleges that Lieu's illegal discrimination improperly interfered with and impaired its ability to conduct business. For example, MSRA alleges that Lieu "stated to Kantrowitz that she would not permit the image of [Yankees'] because she stadium or Mariano Rivera's name to be used did not want 'ghetto congregating in the restaurant" people' from the Bronx (Amended Complaint at gr 15). [* 4] MSRA v Lieu MSRA Index No 654076/13 Page 4 further alleges that Lieu told Kantrowitz that "two African-American gentl_emen who worked at Siro' s would not be permitted on the patio of the building because 'they did not fit in'" but that she did not "interfere with taking smoking or other breaks on the patio" Caucasians at <JI<JI 16- (id. 1 7) . "Inexplicably, prohibition in [MSRA] the alsO and appears to [its] be blame Lieu the for a service of [though it] agreed to that lease attempt an to sublease which prevents 'Indian or Asian food' term, seeks to attempt tie to it to Lieu is baffling and shore its racism by Lieu impeded its business. claim [Lieu] that alleged points to this overreaching in the complaint arguing that the instant lawsuit is simply an attempt to gain leverage in the related lawsuits. Of course, it would be a very serious matter if plaintiff had brought a frivolous lawsuit simply to strengthen its position in a related case" (Sept [emphasis added]; Amended Complaint at i Lieu answered MSRA' s complaint party action against Kantrowitz. 2014 Order at 3-4 18). and commenced a third- She asserts-claims against MSRA and Kantrowitz for defamation and intentional infliction of emotional Dismiss distress Counterclaims Counterclaim at <JI<JI (Affidavit in Support [Af f Ex A 64-72) Sup], She urges of [Verified that the Motion to Answer], complaint [* 5] MSRA v Lieu Index No 654076/13 Page 5 falsely alleges that she discriminated on the basis of ethnic origin, race or color. following allegations For example, in the she claims amended that complaint, the which Kantrowitz verified, are false and baseless and defamatory: (1) that she "advised or stated to Kantrowitz that 'she would not permit Mariano Rivera's name to be used because she did no want "ghetto people" from the Bronx congregating in the restaurant in the building she was operating' and for which she was responsible;" (2) that she advised "or stated to Kantrowitz 'that two African-American gentleman who worked at Siro's would not be permitted on the patio of the building because "they did not fit in;"'" (3) that she "'would come into the restaurant and harass the employees, directing which stations the television could be turned to so as to make certain the restaurant did not attract certain clientele, i.e. "ghetto people" from the Bronx and persons of color;'" (4) that she "'stated . she did not want "ghetto people" from the Bronx congregating' in the restaurant;" and (5) that she "'limited [MSRA] 's right to serve Indian or Asian cuisine because having persons from a third world country, the Indian sub-continent and Asia, would not fit in with [Lieu's] idea of that building's image should be like'" (Verified Answer, Counterclaims at i i 16-18) Lieu further denies ever telling Kantrowitz that MSRA could not use Rivera's name in promoting Siro's and that she ever uttered the words "ghetto people" (Verified Answer, Counterclaims at i i 19, 22). She urges that MSRA and Kantrowitz knew when making the statements in the complaint that they were false and baseless [* 6] MSRA v Lieu and that Index No 654076/13 Page 6 they did so intending to "subject her to scorn, contempt and ridicule, [to] harm her in her trade, business or profession, inflict and [to] (Verified Answer, extreme Counterclaims at ~~ emotional 24-25). distress" She further states that MSRA falsely alleges that she used her credibility as an attorney to mislead a court about the facts concerning MSRA's departure Counterclaims at ~~ from the premises (Verified Answer, 26, 35-36, 40). In her counterclaims, under the heading: "MSRA' s Abuse of Privilege Relating to Statements Made in Legal Proceedings" Lieu alleges: • "the purpose of MSRA' s litigation against [her] was to assert false and defamatory statements in [its complaint] that would be republished in the press" • "MSRA commenced this litigation and made false and defamatory statements in the Complaint about [her] purportedly discriminatory conduct with the intent of having such statements republished in the news media" • MSRA, through among others its managing members Kantrowitz and Paul Carlucci, who is also alleged to be publisher of the New York Post "arranged for the New York Post to publish an article about the Complaint within two days of its having been filed. Upon information and belief, Carlucci, who was the publisher of the New York Post during the relevant period, assisted with arranging to have an article published about the Complaint. Those efforts were successful" and the New York Post published an article titled "Eatery's Rivera room barred due to 'ghetto people' fears: suit" (Verified Answer, Counterclaims at ~~ 2, 5053) . [* 7] Index No 654076/13 Page 7 MSRA v Lieu She against further [he:r] alleges without defend these claims" In her that "MSRA commenced litigation intending seriously to prosecute or (Counterclaim at '3t 57). third-party action against Kantrowitz, Lieu alleges that he caused MSRA to file a verified complaint and that he verified the complaint knowing that it was "replete with false and defamatory allegations" (Affidavit in Support of Motion to Dismiss Third-Party Complaint, Ex B [Third-Party Complaint] at '3t'3t 4-6). Lieu alleges that the statements that Kantrowitz verified were made in his presence were never, in fact, made (Third-Party Complaint at '3t 25) Kantrowitz caused MSRA's abuse of and alleges that privilege relating to statements in legal proceedings (Third-Party Complaint at 13). Lieu seeks damages from Kantrowitz personally for defamation and intentional infliction of emotional distress (Third-Party Complaint at '3t'3t 71-81) . MSRA and Kantrowitz move for dismissal of Lieu's claims against them, urging that the "law is crystal clear that statements made by plaintiff's attorneys or witnesses in the course of judicial proceedings are absolutely privileged" even if made maliciously so long as the allegations are material and pertinent to the issues" in litigation (Aff Supp at '3t 10). They further assert that Lieu is collaterally estopped from claiming that MSRA's claims are frivolous because they [* 8] MSRA v Lieu Index No 654076/13 Page 8 withstood dismissal (Aff Supp motion, arguing facts that, that if true, her at~ 1[a] [ii]). Lieu opposes the counterclaims sufficiently plead could defeat the applicability of the privilege. Analysis For purposes of this motion--as was the case when MSRA's complaint was challenged--Lieu's allegations must be given a liberal construction and accepted as true (Johnson v Proskauer Rose LLP, 129 AD3d 59, 67 [1st Dept 2015]). Whether Lieu can ultimately establish the allegations "'is not part of the calculus in determining a motion to dismiss'" (id. citing EEC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005]). Lieu's counterclaim and third-party action sufficiently state causes of action for defamation infliction of emotional distress. and intentional She alleges the specific statements made by MSRA and Kantrowitz, publication, that the statements were false, known to statements were made to injure her AD2d 544, 546 [1st Dept 1986]). be false and that the (Halperin v Salvan, 117 She also sufficiently states a claim for intentional infliction of emotional distress by claiming that the statements in the pleadings were outrageous and beyond the bounds of decency, false and baseless and that [* 9] MSRA v Lieu Index No 654076/13 Page 9 both MSRA and Kantrowitz knew the statements were false and baseless and published the statements to intentionally malign and harass Lieu and cause her emotional distress (id.). In order to protect litigants and witnesses, "a statement made in the course of legal procee_dings is absolutely privileged if it is at all pertinent to the litigation" and any doubt about a statement should be resolved in favor of relevancy and pertinency. (Mosesson v Jacob D. Firm, 257 AD2d 381, 808 [1999]) 382 [1st Dept 1999], Fuchsberg Law lv denied 93 NY2d The privilege, however, "is lost if abused, and is limited to statements which are pertinent to the subject matter of the lawsuit, made in good faith and without malice" (Halperin v Salvan, 117 AD2d at 548). It will not be conferred, for example, if the underlying lawsuit is a "sham action brought solely to defame the defendant" Finkelstein, 127 AD3d 634, Moreover, (Flomenhaft v 638 [1st Dept 2015]) on "a motion to dismiss a defamation action because of the privilege, the [allegations] must be construed in a light most favorable to the [pleader] and that where there is a question as to the applicability of the privilege, the issue should be decided Finkelstein, 127 AD3d at 638). at trial" (Flomenhaft v [* 10] MSRA Index No 654076/13 Page 10 v Lieu Lieu sufficiently pleads overcome the privilege. facts that, if true, could Significantly, this Court's denial of Lieu's motion to dismiss was in no way a determination that MSRA's allegations have.merit or were not made in bad faith (see Sept 2014 Order at 4 ["what is before the court at this time is whether plaintiff has properly pleaded its causes of action"]). Rather, like here, the Court did not address the merit--or lack thereof--of any of the allegations and simply concluded that outright dismiss the pleadings were dismissal. must pleadings. be In denied the based same on sufficient vein, the to withstand these motions sufficiency of to the Under the circumstances of this case and based on its current posture, the Court cannot conclude as a matter of law that the privilege was not abused as Lieu contends. Accordingly, it is ORDERED that the motions by MSRA and Kantrowitz to dismiss Lieu's counterclaims and third-party claim are denied. MSRA and Kantrowitz are to reply/answer within 20 days of the e-filing of this Decision and Order. This constitutes the Decision and Dated: November. 13, 2015 HON. JE

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